Re: Signed PO–have concerns - Posted by Kathy
Posted by Kathy on April 04, 1999 at 01:18:37:
Thank you all for your valuable advice. I still welcome more! The first thing you all think is that the rent is too low because of the cash flow (150/mo). That is not the case. They are on the high side. The problem tenants are paying $500/mo. plus electric. What brings the cash flow down is owner pays utilities, which I well accounted for at (monthly)
I think it’s a good estimate on what I don’t have actual figures on (maintenance, heat), not counting rehab.
I know the majority of you don’t like to buy places that aren’t tenant-paid utilities, but there’s not much to find around here. Another owner said tenant-paid, but turns out what he does is divies up the bills between # of tenants in each apt. and goes and collects separately from rent – no thank you!
The reason for the contract is because I’d like to take what I can get that way and save the banks for those I can’t get on contract. Also, no closing costs and all that garbage. I don’t think cashflow is bad. Better than most I’ve analysed. I usually come up with a negative figure of $50/mo. because I am considering a bank loan at 80% and seller financing for the 20%, which the banks won’t go for anyway. This means two mortgages, which eats cashflow. That always seems to be my problem. If I’m looking at something in the $60k range, I need at least $12,000 down plus the extras and none of the creative techniques has worked for me.
You may be right that the headaches, time and energy are worth more than the $150, though. I’d rather do without that part of it. Not to mention the cosmetic $$ I feel are needed. The downstairs doesn’t need much but the upstairs will take a bit.
Anyway, that should answer all the “WHYs”. So now that you know more details, what do you all think? It’s starting to sound less appealing to me after hearing from all of you. That’s good, even though it’d be a bummer calling up the agent and backing out. However, he does know we’re concerned about the tenant issue and neighborhood so wouldn’t be totally surprised!
One more thing–C.Sheets etc. have said ANY cashflow is good. Certainly looks more attractive when mortgage is paid off - shouldn’t you be looking at long term as well as the immediate?